Fool TV: Are You Investing in Losers?

For those who can't (or don't want to) view the video clip, what follows is a transcript:

Hi, I'm Tom Gardner, co-founder of The Motley Fool, with my "120" on just how bad so many American stocks are.

Get this: Over the last 25 years, 40% of all listed companies have actually lost money for their shareholders. Remember, the stock market goes up 10% a year. Forty percent of all the listed companies have actually lost money. How can that possibly be?

The answer is that most companies fritter around, fail to gain traction with their customers, and don't generate meaningful rewards for their shareholders. Those gains are won by organizations that succeed over long periods of time. Think of Procter & Gamble (NYSE: PG  ) . Think of Johnson & Johnson (NYSE: JNJ  ) . Think of Amazon.com (Nasdaq: AMZN  ) . Think of Microsoft (Nasdaq: MSFT  ) . Think of organizations that are built, as an organization, to develop success and help for all the constituents of that business. Those companies are rare.

When you go out and search for stocks in your portfolio, remember this. Forty percent of all stocks out there lose money over a 25-year period! It's shocking. It shouldn't be shocking. It should remind you how discerning you should be, how discriminating you should be, in really evaluating the organizations you're investing in and making sure you're picking winners.

That's what we're doing in Stock Advisor every single month -- and across The Motley Fool. The search for winners -- not winners over the next few weeks, not winners over the next few hours; winners over the next few years and hopefully over the next few decades. That's where value is created in America, and that's where stock market winners come from. I'm Tom Gardner with The Motley Fool. Fool on.

For more Fool TV:

Fool co-founder Tom Gardner owns shares of Microsoft. Microsoft is a Motley Fool Inside Value recommendation. Amazon.com is a Motley Fool Stock Advisor selection. Johnson & Johnson and Procter & Gamble are Motley Fool Income Investor choices. Motley Fool Options has recommended a buy calls position on Johnson & Johnson and a diagonal call position on Microsoft. The Fool owns shares of Procter & Gamble. The Fool has a disclosure policy.


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  • Report this Comment On March 27, 2010, at 11:29 PM, bigkansasfool wrote:

    "Over the last 25 years, 40% of all listed companies have actually lost money for their shareholders. Remember, the stock market goes up 10% a year." Who else spotted the outright falsehood in this? The S&P 500 is currently at the same level it was in 1998. Where is that 10% per year? If stocks really went up 10% per year for the last 25 years then the S&P should be at 1787, not the 1166 it is currently at. If you've been in the market the last 20 years in an index fund you've been crushed.

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